Opinions of Value

Your source for appraisal news and trends

How Homeowners Can Prepare for an Appraisal

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Whether a homeowner is seeking to refinance or is planning to sell, an important step in the process is a real estate appraisal. An appraisal typically is conducted to assist a mortgage lender make a wise lending decision. This is different from an inspection, which is a thorough evaluation of a house’s major systems and structural integrity.

blog_image_2_14_12-2Although factors such as geographic location and sale prices of neighboring homes may be out of their control, there are steps homeowners can take to help ensure a reliable, credible opinion of value.

  • Make sure every room in the house is clean and free of clutter so the appraiser can clearly see and document every asset.

[Read more…]

Appraiser Selection is a Key Decision for Lenders

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Given the number of bad loans on their books due to foreclosures, it’s hard to blame lenders if they are more cautious in the current economic environment. Appraisers, however, are performing the same thorough research and thoughtful analysis they always have in order to help lenders make wise lending decisions.

In today’s challenging real estate market, choosing the right appraiser is vitally important for both the lender and the consumer, and working with a Designated member of the Appraisal Institute has many advantages. Appraisers need to provide credible, reliable opinions of value, and that requires education, ethics and experience.

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Real estate appraisers know how challenging it can be to differentiate themselves from the competition. But appraisers who have received the MAI and/or SRA designation from the Appraisal Institute have found the best way to achieve that goal. [Read more…]

Appraisal Institute Honors February Volunteers of Distinction

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vodsmallThe Appraisal Institute has announced its “Volunteer of Distinction” honorees for February: Hugh B. Bass Sr., MAI, of Region IX (Atlanta Area Chapter) and Karen Goforth, MAI, of Region X (Northwest Florida Chapter and West Coast Florida Chapter).

The Appraisal Institute’s member recognition program honors members for their volunteer service to the Appraisal Institute, to the real estate valuation profession and to their local communities. Each month, the Appraisal Institute recognizes one honoree in each region as a Volunteer of Distinction.

Region IX consists of Alabama, Arkansas, Georgia, Louisiana, Mississippi, South Carolina and Tennessee. Region X consists of Florida, Puerto Rico and the Virgin Islands. [Read more…]

Appraisal Institute Shares Tips for Consumers

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Buying or selling a home in today’s housing market can be challenging, but the Appraisal Institute has offered helpful tips to let consumers know how to protect themselves and how to avoid frustration during the process.

Appraisals are a key component of real estate transactions, and consumers can help themselves by following these recommendations from the Appraisal Institute:

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  • Understand the role of appraisals.
  • Make sure the lender hires a qualified appraiser (such as a Designated member of the Appraisal Institute).
  • Accompany the appraiser during the inspection of the property if possible.
  • Request a copy of the appraisal report from the lender.
  • Examine the appraisal report and ask questions.
  • Appeal the appraisal if appropriate.
  • Ask the lender to order a second appraisal by a qualified and designated appraiser.
  • File legitimate complaints with appropriate state board or professional appraisal organizations. [Read more…]

Appraisal and AMC Fees Separated on Revised Settlement Forms

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The Consumer Financial Protection Bureau released the second proposed version of a new Consumer Disclosure Form Feb. 1 that includes clear disclosure of any fee paid to a “Local Appraisal Company” and to an “Appraisal Management Company.”

The Appraisal Institute reported last month that the CFPB is in the midst of developing a new form that would replace the existing HUD-1 settlement statement. In December 2011, Appraisal Institute representatives met with CFPB officials about the new form.

The CFPB has indicated that several versions of the proposed form will be developed and tested with consumers by focus groups, with a proposed rule to be released this summer. [Read more…]

Appraisal Institute Supports Intent of Bank Examiner Bill in Congress

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The Appraisal Institute and American Society of Farm Managers and Rural Appraisers this week expressed support of the goals of House Resolution 3461, the Financial Institutions Examination Fairness and Reform Act (bank examiner bill).

blog_image_2_1_12The two appraisal organizations submitted a statement for the official record of the Feb. 1 House Financial Services Committee hearing on H.R. 3461, The Appraisal Institute and ASFMRA promoted consistency of bank examinations and due process, and any efforts that would enhance consistency in the interpretation and understanding of the guidelines and regulations.

Bank appraisal departments and individual appraisers have often faced inconsistent interpretations of the Interagency Appraisal and Evaluation Guidelines and other applicable guidelines, such as the Policy Statement on Prudent Commercial Real Estate Loan Workouts. The Appraisal Institute also supports due process and an administrative appeals program in connection with disputes regarding valuation or appraisal methodology. [Read more…]

Appraisal Institute Announces Support for New Solar Valuation Tool

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The Appraisal Institute this week announced its support for a new tool that will assist appraisers and others seeking to establish the value of a property’s solar-powered features. The spreadsheet was developed by Solar Power Electric and Sandia National Laboratories.

Finding a way to value residential and commercial properties with photovoltaic (PV) installations is a growing challenge facing the nation’s real estate industry. As more homes and businesses turn to solar power, the need grows for ways to develop reliable and credible opinions of value of the installations and the power they generate.

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PV Value works within a Microsoft Excel spreadsheet to determine the value of a PV system. This is done using an income capitalization approach whereby the energy value is calculated over the lifetime of the PV module warranty. Inputs to PV Value include the zip code of the location, local utility rate and characteristics of the PV system. An appraisal range of value estimate is returned as a function of a pre-determined risk spread. This tool can be used to value a PV system at any location in the U.S. through its interface with the National Renewable Energy Laboratory’s PVWatts simulator. [Read more…]

Appraisal Institute Leadership Sets Organization on Path to Success

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blog_presidentheadersWith the next Board of Directors meeting taking place Feb. 6-8, the Appraisal Institute will continue to focus its efforts in several key areas, particularly the Candidate for Designation Program. I look forward to working with AI leadership on behalf of our nearly 23,000 members in nearly 60 countries, and the valuation profession at large in the coming year.

Hopefully by now you’ve heard about the Candidate for Designation Program, approved by the Appraisal Institute Board of Directors last month. Effective Jan. 1, 2013, the Appraisal Institute will consist of: Designated members, Candidates for Designation, and Affiliates (practicing and non-practicing), as newly defined. The program’s emphasis will be on Designated members and those seeking to become designated. Learn more about the program.

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During 2012, current Associate members will have the opportunity to choose whether they wish to become Candidates for Designation or Affiliates, as newly defined. [Read more…]

Appraisal Institute Continues Push on Customary and Reasonable Fees

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The Consumer Financial Protection Bureau recently issued a new Interim Final Rule on the Truth-in-Lending Act’s provisions related to appraiser independence. This rule includes the previously issued rules relating to “customary and reasonable fees” that originally were issued by the Federal Reserve Board last year.

blog_image_1_26_12The CFPB Interim Final Rule was issued in order to restate all of the Federal Reserve’s Truth-in-Lending Act regulations as CFPB regulations, effective Dec. 31, 2011, as authorized by the Dodd-Frank Act. As part of this process, the CFPB adopted the Federal Reserve’s Interim Final Rule, and the agency stated its action does not constitute any new regulatory obligations.

 

The agencies are under statutory deadlines to complete three rulemakings; requirements for higher cost mortgages, appraisal management company registration & oversight requirements, and automated valuation model quality control standards by January 2013. No statutory deadline exists for customary and reasonable fees. [Read more…]

New Appraisal Institute Book Helps Estimate Value of Convenience Stores

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Convenience stores represent a complex and fascinating retail channel that has responded to the economic challenges of the last decade by embracing new ideas, according to a new book by the nation’s largest professional association of real estate appraisers.

convenience_store_book_coverThe second edition of “Convenience Stores and Retail Fuel Properties: Essential Appraisal Issues,” published this week by the Appraisal Institute, is intended to help appraisers of convenience stores keep up with these changes and understand how real estate value is created and estimated in the industry.

This book should prove to be a valuable reference not only for real estate appraisers, but also for eminent domain attorneys, convenience store operators and corporate managers. [Read more…]